| Sekura Energy Private Limited | ||
| 'CCR AA/Stable' assigned to Corporate Credit Rating | ||
| Rating Action | ||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||
| 1 crore = 10 million | ||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has assigned its 'CCR AA/Stable' corporate credit rating (CCR) to Sekura Energy Private Limited (SEPL).
The ratings reflect the company’s healthy financial flexibility, in the absence of any external debt and the strength that SEPL derives from its investment in Solaire Surya Urja Private Limited (SSUPL). SEPL is also a designated sponsor for the Anzen India Energy Yield Plus Trust, a registered infrastructure investment trust (Invit) with SEBI (Anzen; rated 'Provisional CRISIL AAA/Stable'). SEPL will hold a minimum 15% equity stake in Anzen which is proposed to raise equity capital through private placement route in Q3FY23.
The rating also factors in the articulation provided by the company, confirming that there are no plans to raise any external borrowing in medium term and the purpose of the entity remain as an investment holding company and the sponsor of Anzen. CRISIL Ratings understands that under the guidelines issued by Pension Fund Regulatory and Development Authority, the designated sponsor needs to be rated for pension funds to become eligible for investment in Invits. Any investment and other cash flow requirements shall be met by available cash balance and capital infusion from SEPL’s parent, Edelweiss Investment Yield Plus fund (EIYP) and not via external debt.
The above strengths are partially offset by subordination of SEPL’s rights over investment’s cash flows to their external senior lenders. |
Analytical Approach CRISIL Ratings has followed the holding company approach to assess the credit risk profile of SEPL based on investment in operating company which holds a solar power generation asset. SEPL would also have minimum 15% holding of Anzen, post the InvIT units are raised. |
Key Rating Drivers & Detailed Description Strengths:
SEPL is likely to receive steady cashflow from its stake in SSUPL given the healthy DSCR of solar asset. The underlying SPV has a 140MW of solar asset with 25-year PPAs with NTPC Limited (‘CRISIL AAA/Stable/CRISIL A1+’). The entire 140 MW capacity became operational in August 2017. The PPAs have fixed tariff of Rs.4.35 per kilowatt hour (kWh) throughout their tenure. The plant has a satisfactory operational track record of around 4 years and healthy annual plant load factor (PLF; ~25.70% for fiscal 2022 and 26.70% for fiscal 2021), higher than the P90 estimation of 24.20% for fiscal 2022 and 24.37% for fiscal 2021.
Under its proposed investment in Anzen, strong operating and healthy DSCR profiles of the underlying two transmission assets would further lend stability to the cashflow being generated. The InvIT will also have a right of first offer (ROFO) for SEPL’s stake in operational solar asset viz. SSUPL which it plans to acquire it in the next 1-2 years. The rating is further strengthened by strong ownership and management supported by directors at EIYP.
SEPL does not have any external borrowing and the company has confirmed that none of its stake in group companies is encumbered. Furthermore, the company has also confirmed that investment and other cash flow requirement, if any, will be met through funding from the parent company and not through external debt. The loans from the parent company does not have any contractual debt servicing. Any deviation in this understanding will be a rating sensitivity factor.
Weakness:
SEPL’s right over SSUPL’s and Anzen’s cash flow will be subordinated to that of external lenders of respective companies and will be available for upstreaming after meeting all the debt servicing and reserve requirements of these lenders. However, this is partially mitigated by the strong credit profile of investments with adequate liquidity cushion. |
Liquidity: Strong SEPL had a cash and cash equivalents of Rs. 746.54 million as on September 30, 2022. The company does not have any debt obligation and cash generated will be sufficient to meet the company’s expenses. The acquisition of stake in Anzen will be funded by EIYP. |
Outlook: Stable CRISIL Ratings believes that the credit profile of SEPL is supported by absence of external borrowing and high value of investment in the key operating entity of SEPL. Further, it is expected to enjoy strong financial flexibility through stable cash inflows from investments including Anzen. |
Rating Sensitivity Factors Upward factors:
Downward factors:
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About the Company, SEPL SEPL (Formerly known as Sekura Energy limited) is 100% owned by EIYP, whose investment manager is Edelweiss Alternative Asset Advisors Limited (EAAA). |
About EIYP EIYP is an alternative investment fund trust with a strong capital commitment from group of domestic and global investors. EIYP has large investments in power transmission, road and renewables and is presently holding 16 operational assets comprising of 14 energy sector (includes two transmission) and two in roads sector. |
Key Financial Indicators (Standalone basis)
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||
Criteria Details
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